Brexit Bulletin: President May?

  • Campaign is all about May’s leadership rather than the party
  • May’s strategy means lawmakers will owe her personal loyalty

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Britain is preparing for its first presidential election.

That’s the theory posed by Bloomberg’s Robert Hutton and Alex Morales on Tuesday as they analyze Prime Minister Theresa May’s campaign.

U.K. Prime Minister Theresa Makes U.K. General Election Campaign Statement

Theresa May.

Photographer: Chris Ratcliffe/Bloomberg

It’s one that emphasizes her personal brand rather than that of her Conservative Party. “THERESA MAY’S TEAM” screamed the banner at one London campaign, with the name of her party in small letters underneath.

The aim is to draw a distinction between opposition leader Jeremy Corbyn, whose leadership credentials are questioned in the polls. It also makes those Tory lawmakers who win seats in June beholden to May when it comes to voting on Brexit, although what then follows will be her responsibility too.

Remember that prior to calling the election, her rank and file showed signs of disquiet over Brexit and then a bigger rebellious streak over fiscal policy,which ended with the government reversing a tax increase on the self-employed.

“For all new members of Parliament, what will be more important than their pre-existing attitudes is that fact that they’re ‘Theresa May’s Team,’” said Philip Cowley, author of “The Rebels,” a study of parliamentary discipline.

The strategy may be paying off. The latest ICM poll showed the Tories on 49 percent support versus 27 percent for Corbyn’s Labour Party.

Corbyn launches his election campaign in Manchester on Tuesday having told Buzzfeed he will not step down if Labour loses on June 8. 

A Macron-Like Mandate

May on Monday said the election of pro-European Emmanuel Macron as French president highlighted why she needed an “equally strong mandate” to fight Britain’s corner in the Brexit talks.

Macron adviser Jean-Pisani Ferry told the BBC that while the president-elect won’t try to punish Britain in the Brexit negotiations and doesn’t want them to end without a deal he will be “tough” in the talks.

“He was elected with a strong mandate which he can take as a strong position into the negotiations,” May said. “Every vote for me and my team will strengthen my hand in those Brexit negotiations.”

She also recommitted the Tories to cutting net migration to the “tens of thousands” despite the government’s repeated failure to do so.

Staff Shortage

The immigration target may not go down well with British businesses struggling to find staff.

The Recruitment and Employment Confederation said overnight that the availability of workers for both permanent and temporary positions fell at the fastest pace in 16 months in April.

It said there’s a shortage of suitable applicants across a wide range of industries and that Brexit and uncertainty over immigration rules might exacerbate the problem.

Pro-EU lobby group Open Britain responded by calling on the government to drop its “divisive and damaging immigration target, which if achieved would come at the expense of jobs and economic growth.”

Eastern European Lifeline

Eastern European nations struggling in the event of a “hard” Brexit may soon be extended a lifeline by a London-based institution — the European Bank for Reconstruction and Development. 

The EBRD is standing ready to help should Brexit starve some of the economies it lends to, Bloomberg’s Andra Timu and Aaron Eglitis report. Countries such as Poland and Croatia are among the most reliant on funds from the EU budget, which is set to shrink if the U.K. opts to abandon the single market.

“South-eastern Europe could be quite affected in case of a hard Brexit,” EBRD President Suma Chakrabarti said in an interview before a three-day board meeting that starts Tuesday in Cyprus. “In that case, the EBRD will have to act counter-cyclically and do more.”

Brexit Bullets

  • Retailers had a strong April due to the Easter holiday. The British Retail Consortium said sales rose 5.6 percent from a year earlier and Barclaycard said consumer spending was up 5.5 percent
  • U.K. house prices recorded their first quarterly decline in more than four years, adding to signs that the property market is cooling
  • More than a quarter of U.K. financial services firms say they will move staff or operations abroad or are reviewing their domicile because of Brexit, according to EY. More than half of firms still plan to pursue mergers and acquisitions, the consultancy said
  • Morgan Stanley economists led by Jacob Nell say the Bank of England won’t raise interest rates until after Brexit in March 2019. “Given the risks of turbulence during the Brexit talks, and the risk of a hard outcome, which we put at 50 percent, we see a strong argument for caution on rates,” they told clients in a report
  • Algebris Investments CEO Davide Serra estimates Brexit will cost the U.K. 7 percent of GDP over the next 8 years, which will be negative for gilts
  • UBS Chairman Axel Weber says Brexit will mean volatile European markets for two years 
  • The number of people living elsewhere in the EU who applied for a British passport jumped by more than a third last year to 13,070, according to the Financial Times
  • Sterling’s decline since the referendum last June is responsible for 5 pence of the recent increase in the cost per litre of petrol and diesel, according to the Liberal Democrats
  • European Central Bank Board member Yves Mersch warned against a “regulatory race to the bottom” by euro-area governments to lure banks from London
  • European Commission President Jean-Claude Juncker has called the leaked report of his Downing Street dinner with May a “serious mistake,” Handelsblatt says

And Finally…

The kids are still doing alright. A survey by Deloitte found that despite uncertainty about Brexit, so-called millennials reported increasing outlays on pubs, clubs and restaurants in the most recent quarter. At the same time, the adults born after 1983 cut back on gym memberships, Deloitte said, according to CityAM.

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